The effect of phorbol esters on cyclic AMP production in rat cerebral cortical slices was studied using a prelabelling technique to measure cyclic nucleotide accumulation. Cholera toxin-stimulated cyclic AMP accumulation was enhanced approximately 2-fold by phorbol 12-myristate, 13-acetate (PMA) which alone had no effect on cyclic AMP production. The augmentation by PMA was maximal within the first hour of incubation, decreasing progressively thereafter. Protein kinase C activity was decreased 80-90% during a 3 hr exposure to PMA, as was 3H-phorbol 12,13-dibutyrate binding. Both phosphatidyl serine and arachidonic acid were found to enhance protein kinase C activity in a concentration-dependent manner, an effect that was attenuated by prolonged incubation of the brain tissue with PMA. The results indicate that exposure of brain slices to phorbol esters causes a down-regulation of rat brain protein kinase C, and that this modification corresponds with a decrease in the ability of PMA to augment cyclic AMP production, suggesting a functional relationship between the two systems in rat brain.